Offline vs Online – Revenue profile of Directory publishers

Published 2nd November

The past week or so has seen some interesting developments in the European Directory sector. Take three of the largest publishers; Eniro, Pages Jaunes and Yell.

Last week the Swedish Directory publisher Eniro passed a key financial milestone, according to its third-quarter and year-to-date earnings report. Through nine months of 2009, online revenues surpassed offline (print revenues), making Eniro a majority online directory business. Excluding voice, 50.6% of Eniro’s revenue is attributed to online.

The French Directory publisher Pages Jaunes is not that far behind, according to its third quarter and year-to-date earnings report. Through nine months of 2009, online revenues are approaching a similar milestone. Excluding voice, over 44% of Pages Jaunes revenue is attributed to online. A number they are clearly looking to rapidly grow. The new CEO presented a series of new products to be rolled out next year to accelerate organic revenue growth. Interesting mobile internet is highlighted as an important part of the Pages Jaunes equity story but despite a rapidly growing user base, for now, the company has yet to deliver commercial offering.

In contrast the UK Directory publisher Yell has some way to go, according to forecasts for the 2010 financial year Yell is expected to achieve online revenues of around £178 million in contrast to offline revenue of £395 million. Excluding voice, just 31% of Yell’s UK revenue will be attributed to online. Recently announced initiatives like the Google reselling agreement and the flurry of activity around mobile should help future online revenue growth.

It is clear that online and mobile is the future for these organisations. The challenge clearly is the speed of transference of their revenue online, ability to adopt new business models and stay true to their core business principles.    

Source: Exane BNP Paribas estimates

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